Document background
The Incentive Bonus Agreement serves as a crucial document in Danish employment relationships where performance-based compensation is implemented. It is typically used when companies want to establish a formal, legally compliant framework for rewarding employee performance through additional compensation beyond base salary. The agreement must align with Danish employment law requirements, including the Danish Salaried Employees Act (Funktionærloven) and tax regulations. This document is particularly important for establishing clear, measurable performance criteria, defining calculation methods, and setting out payment terms while protecting both employer and employee interests. It should be reviewed regularly to ensure continued alignment with business objectives and legal requirements.
